NIFTY SLIPS OVER 3% AS US FED LIKELY TO lower PACE OF RATE CUTS

Mumbai, Nov 18, 2024: The Nifty IT index plummeted by over 3% in early trading on Monday, November 19, as market analysts foresee a slowdown in the pace of interest rate cuts by the US Federal Reserve.

In its latest monetary policy review, the Fed is expected to tone down its accommodative stance, leading to increased caution among investors. This has resulted in a wave of selling in the IT sector, which was already under pressure due to global economic concerns and rising inflation rates.

"The market is reacting nervously to the prospect of slower rate cuts by the US Fed," said Rakesh Mohindra, Head of Research at Edelweiss Asset Management. "This has led to increased sell-off in technology stocks, while other sectors like pharma and infrastructure have remained relatively insulated."

The Nifty IT index was down over 2.5% at 11:30 am IST (IST), with some of the top laggards including TechM, HCL Infosystems, and LTI. Other indices such as Nifty50 and Nifty300 were also under pressure.

Meanwhile, the US stock market saw similar sell-off cues earlier in the day, reflecting investor concerns over the Fed's rate cut plans.

In global markets, yields on Indian benchmark bonds rose sharply amid increased caution, while the rupee slipped against its international rivals.